Aadhaar verification process for phones to start soon; task to cost Rs 1000 cr for telcos

A bulk of India’s 1.1 billion telecom subscribers will soon have to go through a fresh verification exercise based on their Aadhaar identification, following an order of the Supreme Court last month.

The industry estimates the process could cost at least Rs 1,000 crore at a time when companies are burdened with debt and fighting a tariff war.

“All licensees shall intimate their existing subscribers through advertisement in print/electronic media as well as SMS about the orders of the Supreme Court for re-verification activity and shall upload the complete details of this activity on their website,” said a notice issued by department of telecommunications on Thursday.

The notice comes within a month of the top court order making it mandatory for telecom subscribers to be re-verified via Aadhaar cards in a push to root out those who have used fraudulent means to get connections.

SC passed the order on February 6, providing a deadline of exactly one year — February 6, 2018 — for compliance.

Phone companies went through a similar exercise a few years ago after the government asked them to conduct a know-your-customer (KYC) vetting process by calling for ID and address proofs in order to tighten security and clamp down on use by criminals and terrorists.

The new diktat will mean that only those with Aadhaar cards can have subscriptions. Privacy advocates have expressed their concerns about the widening practice of Aadhaar being made compulsory for purposes of establishing identity and access to entitlements.

The mammoth verification exercise will be a costly affair, said the main industry lobby group.

“It is indeed a big challenge for the industry as this will entail capital expenditure,” said Rajan Mathews, director general of the Cellular Operators Association of India (COAI), which represents the top telcos including Bharti Airtel, Vodafone India, Idea Cellular and Reliance Jio Infocomm.

“It could cost at least Rs 1,000 crore in training people, getting recognition devices and setting up processes,” he said, adding, however, that in the long run, the move would be beneficial to all, including the industry and the government.

The department has drawn up an extensive methodology after its meeting with industry and representatives from the Prime Minister’s Office on February 13, the notice said.

For Aadhaar based re-verification, the telecom operator will have to send an SMS to a subscriber with a verification code after establishing that the SIM card is physically available with the person.

“Only after this activity the licensee shall proceed for e-KYC process. The licensee shall then seek confirmation from the subscriber about the re-verification of his/her mobile number after 24 hours through SMS,” the notice said.

BIGGER DRAG ON OLDER TELCOS

Experts said the move would be a big drag on the telcos, especially the older ones as most of their subscribers were signed up before the government allowed the Aadhaar-linked e-KYC verification process last August. Most subscriber additions after August won’t need to be reverified.

New entrant Reliance Jio Infocomm will be the least hit as most of its 100 million users have come on board via the Aadhaar-based e-KYC since it started services in early September.

Prashant Singhal, global telecom lead at consultancy firm EY, noted that the additional cost for telcos comes at a time when the industry is struggling financially due to the ongoing price war triggered by Jio’s entry.

While agreeing that the exercise is a mammoth talk, Hemant Joshi, partner at Deloitte in India, said “if executed well, may not take a long time”.

“While the task is huge, the digital platform of Aadhaar connected with the mobile number should facilitate this transition. The most convenient way to do this is using one-time password. There are other ways to do it as well; for instance, using location-based coordinates,” he said. Jio typically does it through a fingerprint reader for biometric verification.

Source: ET Tech